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Fiber-to-the-Home in U.S. Markets Still Minimal

The number of U.S. homes receiving video, internet and voice services over direct fiber optic connections have doubled over the past year, according to a new study sponsored by the Fiber-to-the-Home (FTTH) Council and the Telecommunications Industry Association (TIA).

According to the study, released during the "Digital City Expo" in Reston, Virginia, 1.34 million American homes are now connected to the internet via end-to-end fiber optic connections, with FTTH now passing 7.9 million homes. However, this milestone won't be grounds for a celebration, since that's still less than one percent of the U.S. addressable market.

This growth compares to 671,000 connections and 4.1 million homes passed as of March 2006. Further, the study shows that fiber-to-the-home is being installed by a very wide range of incumbent and competitive providers, and not just large telephone companies (as some people might assume).

Accounting for more than 430,000 FTTH subscribers are small rural telephone companies, medium-sized telephone service providers and cable companies, private facilities-based competitive local exchange carriers and public entities such as municipalities and public utilities.

"While Verizon is the largest single provider of fiber-to-the-home services, our figures show that there are more than 340 companies serving customers with these high bandwidth services," said Mike Render of RVA Market Research , author of the study. "In fact, small rural telephone companies are actually leading the way in terms of penetration -- with three percent of their combined customer base now connected via fiber-to-the-home."

Compared to the leading global markets for high bandwidth broadband -- primarily Japan and South Korea -- the U.S. is now so far behind that catching up at the current rate would likely take more than a decade.

Both organizations have urged policymakers to reduce barriers to next-generation broadband deployment, with the FTTH Council recently calling on the U.S. government to adopt a strategy for universal access to broadband connections at transmission speeds of 100 megabits per second. It's not clear what barriers exist, beyond the known lack of infrastructure investment.

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